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Tuesday, October 23, 2012

iPad mini : copycat / end of innovation for Apple ?

The Myth of Innovation

Innovation does not occurs alone. There is no "epiphany" and no "Eureka" moment. There is no lone inventor that revolutionize an industry. All this is a myth as was Steve Jobs and Apple mystical innovation aura.

Please refer to the excellent book by Scott Berkun : The Myth Of Innovation if you want detailed proof. In order for an innovation to succeed, it has to be perceived as original and, like war, the winner is rewriting history to produce a nice and convincing narrative. Winning, these days, means being the dominant brand in your category. Sometimes it can be extravagant (Facebook), sometimes it can look like a religion (Apple, Open Source, etc.).

Our brain is cabled to like simplistic and logical stories that explains otherwise very complex systems : we thrive simplicity and we don't like complex subjects that are in shade of grays. We want simple solutions to complex problems and, more than anything, we want to be convinced that ... we are right !

Marketers know it very well and use this each time they interact with a potential customer. They create for us a nice magical story that we can relate to (that our simple brain _want_ to believe) and integrate into our library of (simple) knowledge. If it works well, we will buy their product. If it work very well, we will be convinced that their service or product offering is unique. It is the only product/service that can satisfy us : others are false gods, they don't innovate, they can only copy our brand and, as such, they can not satisfy us.

Don't make me wrong : Steve Jobs was a genius. A pure marketing and financial one. He created a distribution platform (iTunes) and various readers (iPod, iPhone, iMac, iPad, iMini, etc.) that were used to sell content. As a pure intermediary between the consumer and the producer (music, movies, TV, apps, etc.) he was able to secure contracts where Apple will cash 30% of the whole sale. This is genius and great entrepreneurship !

The iPad mini : the first reactive move from Apple (in recent history)

I don't doubt the iPad mini is a great product. They all are. However, I really believe this will mark a turning point. I have use a 7 inch tablet for years (samsung galaxy IIRC) and for month a Nexus 7 from ASUS/Google. Amazon has produce its kindle for month.

In short : Apple competition already have taken the market by storm. And Apple has been forced to react.

React.

Interesting change. Of course, massive afficionados, tech-media and mass-media will be the first one to stress that "the others" don't target "exactly the same market" that "they have superior characteristics" (RAM, CPU, etc.) but ... we can expect to have a better experience on the mini (well, the fact is those authors did'nt even test it!). Of course, the "Retina display" is not present but ... that's OK. Remember, it target a "different market".

Apple : big bang of big crunch ?

All in all I really think this is a tipping point for Apple : what is the advantage of their most recent products ?

For the first time, even tech-media and mass-media started to look around and were forced to compare the latest version (iPhone5, ipad mini) to the competition. And in each case, the customer benefit was not ... clear. In each case, we were back to very weak differentiation factors (CPU, resolution, size [7.9 inch is a great innovation, it is way better than ... 7 inch. Really ?]).

For previous product launch, Apple always introduce real value for their customers. For their last two products it was not the case. None of them were really disruptive or "innovating" as we like to label things. They were incremental improvement and were driven by market and shareholders pressure instead of the desire to produce a great innovation.

I really believe that Apple produces both the iPad mini and the iPhone5 because of extrinsic motivation namely shareholder pressure and expectation. They yield to external pressure instead of internal need to do the best product and to innovate. They started to become mainstream and to produce regular product.

Of course, mainstreaming is not what your customer want, especially the Apple customers. They are paying a premium for something premium. They are paying a premium for each bit of data, for each piece of software and for each piece of content (remember the 30% ?).

Conclusion

The open ecosystem of Android/Linux dominate officially the smartphone and tablet market. Even for a single manufacturer, Samsung is taking the lead out of Apple (number of unit, not yet sales or profit). Android is the new PC while Apple looks more and more like an Amiga or ... an Apple II. More integrated (only one company) and maybe superior for this reason but with no capacity whatsoever to target all the markets that Android targets right now (rugged, secure, low end, high end, embedded in a running treadmill, 5 inch, 7 inch, 8 inch, etc.)).

With these two new product (iPhone5 and iPad mini), Apple looses its mojo, mainly because it yields to external pressure (shareholders). Apple _had_ to present new products in order to reach its target and fuel its expected growth. For the first time, even Apple-convinced customers have to look at a detailed technical specification instead of enjoying a "unique experience". Nothing unique in these two releases...

This could be the beginning of the end for Apple because, its huge market capitalization is based on the premises of future growth. It inflated very fast and, like most bubble, it could deflate even faster especially given the current financial crisis and mad expectations of the surviving investors.

All in all, I really think that open ecosystems have way better chance of success because they can adapt and create various products, including for "niche" market (please see "the long tail" by Chris Anderson for more on this) while a mainstream and proprietary vendor will always be challenged by competitors on his market but also by a myriad of smaller competitor that address very specific needs and markets.

Open ecosystem fuels innovation because the entry cost is way lower : trial and errors happens at a much faster pace and, nobody being "in control", it increase competitions as new challengers can rise very fast (Samsung is the current leader but you can expect LG, ASUS, Huawei and others to ... innovate at a furious pace to reach the summit). This benefit the customer that has more choice and pay a lower price for the same (or even better!) service.

13 comments:

Great article. I have been a Mac addict since 1988 and only recently (past two years), I have been shifting over to Open Source and loving it. I don't feel as restrained as I did when using Mac products. I now feel I have many possibilities and way more flexibility than I ever had using Macs.

Thanks for your comment. I have been an Apple and Mac addict (Apple ][, then Mac) but I left the boat when the clones were introduced (1996) and I certainly did not want to antagonize Apple and their product.

I'm now an open source addict (since 1997) and I'm completely biased (I hope everybody knows it!). I am not anti-Apple or Microsoft : they are doing great products and they will continue for a very long time !

However, at the end of the day, I really think that open-platforms _will_ succeed...

I also feel the same, with all previous Macbooks, I've felt that 1200-1500 for an excellent Macbook which will last 3-4 years is a great investment.

I waited since February with a broken screen (still usable, but fades to black periodically because I think it has a broken connection in the screen) and in the summer they didn't release the 13 inch Retina Macbook I was a little disheartened, but learned in October it'll arrive, so I waited some more.

I knew that buying this Macbook would last me 3-4 years, it'll have the best screen on the market, it'll be fast, I love OSX over Windows and the hardware in general is second to none, 7 hour battery, thin awesome design, sturdy too as I dropped mine on the tiled floor and it received nothing more than a dented corner (perhaps when the screen got busted). The screen and trackpads are second to none.

I knew you could buy a windows laptop with great specs for 800 euros, but I also knew the battery would be crap, the keyboard is awful, the trackpad is useless, etc, etc. It was WORTH to pay just shy of double the price.

Then when they released the 13 inch Retina Macbook, wow.....what a disappointment....

1) only a dual core i5 cpu?2) 128GB and it'll cost you more than 1500 euros3) intel 4000HD graphics?????

To get a good one, you need to go with the 2.9 i7 option, but even then it's still dual core. the 256GB variation will push you to 2000 euros....

All of a sudden, I feel exploited, I am not going to pay 2000 (2200 for the configuration I wanted) for a laptop, I feel that 2000 euros is a top mental barrier that going over that would be foolish.

All of a sudden, I feel they are not worth it, that I won't upgrade and I'm considering fixing my old macbook and continuing another year.

It's quite simply 5-600 euros too expensive and the only thing which keeps me from splashing out on a super awesome PC, is the operating system. Don't mention linux, I'm a user since 1995 and I shake my head every single time I use it, it's like they learned nothing about how to create a successful desktop.

Thanks for your feedback. I did not notice those trends but I know that competition is increasing on the MacBook too with the Ultrabook market segment and you can find very valuable alternatives (Disclaimer : I use an UX31 from ASUS to write this comment / http://openceo.blogspot.ca/2012/01/random-ubuntu-notes-to-install-asus.html Price 1099$ : http://www.amazon.com/Zenbook-UX31E-DH52-13-3-Inch-Ultrabook-Aluminum/dp/B005SY32Q2).

Now, you can install Linux on any Ultrabook but you can also install MacOS (Intel) even if this is not officially supported by Apple (and maybe illegal!) since Apple migrate from powerPC/IBM platform to Pentium/Intel processors.

Now I can only agree that Linux on the desktop _was_ hard and behind Mac and Windows. The new Ubuntu (http://www.ubuntu.com/) release (12.10 Quetzal) is great and provide a wonderful user experience (I did a review here, sorry in French for the moment : http://bligneri.blogspot.ca/2012/10/ubuntu-1210-unity-performance-reseaux.html). All in all, maybe you should try 12.10 ;-)

We have a bunch of Thinkpad at the office, both IBM and Lenovo ones. As far as I can tell, the quality is comparable/the same. We have perfectly functional Thinkpads from 8 years ago and we nickname them "indestructible" (the Lenovo ones as well ;-).

However, they do not compare well to mini and ultrabooks : design seems more and more important to users & consumers.

I don't believe that the argument is about the hardware anymore. It is now the captured audience that is addicted to the ecosystem and the 100s of dollars that are now sunk into the apps that people have purchased. Now the arguments are purely emotional and no longer rational!

Well, of course, the Apps are a factor but I really think that captive audience tend to be more wise these days and are not attached to a product/brand as much as before. Also, I don't know of any "true" Applemaniac that tried the Android app store and check for apps : they believe they have the best app store and the best ecosystem without any fact checking.

People pay for a service and are more and more used to a rapid evolution of the tools (intelligent phones and tablets are recent example) and if the benefit is clear, changing from one technology to another is very easy. Not necessarily for us (older people!) but for the digital natives it is !

My point with this article was detect the moment when an open-ecosystem take the lead. The evident sign is that mass-media (that would like to only speak about mass-market and mass-brands) are forced to reconsider and compare a mass-brand to ... something else. It means that the market strength are bout to change, it is somehow an inflection point and hardware comparison is only a consequence, not the cause.

The cause is a massive eco-system composed of various players (Android) is more and more relevant and that the massive-Brand position (Apple) is more and more difficult to maintain.

It really reminds me of another war : the "PC wars". The PC succeeded against competitors that were way better (Atari, Amiga, Apple, etc.). At this time hardware comparison was not strong. When the PCs started to gain momentum, hardware comparison became the norm...